This was the MAIA’s priority bill for this legislative session
The Massachusetts Association of Insurance Agents (“MAIA”) announced this week that Governor Patrick had signed the bill entitled, “An Act Relative to Liability Coverage Under the Massachusetts Property Insurance Underwriting Association” (“Fair Plan”). According to a recent MAIA Flash Bulletin, this has been the priority bill for the Association during this legislative session. With its passage, the new law amends the FAIR Plan’s statutory mandate to require it to provide liability coverage for a Non-Owner Occupied Dwelling Policy for 1 to 4 residential units. In the aforementioned Bulletin to its members, the MAIA explained why it was asking agents to urge the Governor to sign the bill:
“…it is a good piece of consumer legislation that will provide important liability protection for property owners, while at the same time saving property owners three (3) to four (4) times the cost of insurance premium if a monoline liability insurance policy was purchased in the Excess/Surplus lines market. By providing both coverage for the property as well as liability coverage under the policy, property owners will not have to incur the additional cost of a 4% tax on the premium along with inspection fees.”
Law takes effect January 8, 2015
On October 9, 2014 the Governor signed the bill into law. Since the bill did not have an emergency preamble making it effective immediately, the law will take effect ninety (90) days after its signing on January 8, 2015.
The following is an excerpt of the signed bill that appears in the image to the right, both of which were provided courtesy of the MAIA:
Section 1 of chapter 175C of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by inserting after the word “coverages”, in line 11, the following words:-, including liability coverage for non-owner occupied residential dwellings of 1 to 4 units either by endorsement or as a stand alone policy; provided, that a completed and signed application for such non-owner occupied dwelling liability coverage submitted to the association shall constitute a certification by the applicant, or a duly authorized agent or producer submitting the application on the applicant’s behalf, that the applicant has attempted to obtain non-owner occupied dwelling liability coverage in the voluntary market and has been denied non-owner occupied dwelling liability coverage by at least 2 insurers who provide such coverage in the voluntary market.
